IRA blamed for £22m Belfast bank raid

The Provisional IRA was responsible for the £22m Belfast bank raid, the chief constable of Northern Ireland said today.

Hugh Orde told a Belfast press conference that the terrorist group - linked to Sinn Féin, which is negotiating to share power with the Democratic Unionists - was "responsible, and all main lines of inquiry lead in that direction". The news has thrown the province's fragile peace process into disarray.

The implication is that the IRA was planning the robbery, one of the largest bank jobs in history, as Gerry Adams and Martin McGuinness negotiated a power-sharing deal with the Democratic Unionists.

Downing Street immediately said that the prime minister, Tony Blair, took the development "very seriously".

"The PM has made it repeatedly clear over the past two years that the political institutions in Northern Ireland can only be restored if there is a complete end to all paramilitary activity by those involved, and that includes all criminal activity," a spokesman said.

"He fully supports the chief constable in his efforts to bring those responsible for this major crime to account."

Mr McGuinness, Sinn Féin's chief negotiator, responded by saying that the police did not have "one scrap of evidence" that the IRA were involved. He said Mr Orde had made unfounded, "politically biased" allegations.

Mr Blair and his Irish counterpart, Bertie Ahern, led the pre-Christmas power-sharing negotiations, which foundered on Sinn Féin's refusal to comply with the DUP's demand for IRA weapons decommissioning to be photographed.

The Northern Ireland secretary, Paul Murphy, who will brief MPs on developments when parliament returns next week, said the revelation virtually destroyed any chance of a political agreement before the next general election.

"I think it is unlikely that we will be able to get a resolution along the lines of what we agreed back before Christmas. I do not think that is realistic between now and the election."

But he went on: "I do not think it is the end of the process, I don't think for one second that is the case. We have gone too far down the line for that.

"The feeling I have, which I guess is shared overwhelmingly by the people of Ireland, north and south, is one of great disappointment. We were hoping before Christmas for a real breakthrough, we were nearly there and this has obviously affected the possibility of that very seriously indeed."

Mr Murphy said no decision had yet been taken on whether to apply sanctions to Sinn Féin.

The Irish taoiseach, Bertie Ahern, called the news "a serious setback" for the peace process.

"It underscores the need for compelling commitments both in word and deed that the full spectrum of IRA paramilitary activities and capability has been brought to a definitive closure," he said.

The Ulster Unionist leader, David Trimble, whose party was overtaken by Reverend Ian Paisley's DUP in last year's elections, urged Mr Blair to ban Sinn Féin from any future Stormont Assembly.

"Gerry Adams has betrayed the prime minister personally," he said.

Ian Paisley Jr, the son of the DUP leader, reacted to Mr Orde's announcement by saying that Sinn Féin was "finished" in the power-sharing negotiations. "IRA behind the crime of the century. It's over for Sinn Féin, and we must move on without them."

Mr Paisley Jr said Mr Blair had already spoken to his father today, and that more talks were planned for next week. "The PM must feel suckered again," he said.

Mr Orde revealed that Northern Bank, the victim of the robbery, would be withdrawing all its banknotes and replacing them with differently coloured ones, making the robbery "the largest theft of waste paper in history".

The chief constable made it clear that the implications of his announcement were "a matter for politics and politicians". But, he said, "this was not a victimless crime. Two families were kidnapped, and people were threatened with death. It was a violent and brutal crime, committed by violent and dangerous criminals. It was not some Robin Hood effort."

Mr McGuinness told a brief news conference in Belfast that there was an agenda by the government and "securocrats" to try to "criminalise and marginalise" Sinn Féin and stop the peace process. But he said republicanism would not be cowed.

"We have told both the British and Irish governments that Sinn Féin will not countenance any attempt by the DUP, or by the governments or by anyone else, to demonise this party," said the former education minister of the suspended Stormont executive.

Mr McGuinness said that after the allegations were made he met with a high-ranking IRA figure who assured him the IRA was not involved.

Mr Murphy is expected to meet the Irish foreign minister, Dermot Ahern, next week, while Mr Blair will hold talks after the Irish prime minister returns from a trip to China.

Downing Street said the incident would be referred to the Independent Monitoring Commission, set up to examine any continuing activity by paramilitary groups.

The Northern Bank's decision to withdraw its currency is understood to involve the withdrawal of up to £300m in paper currency after talks with police chiefs. All existing £10, £20, £50 and £100 notes will be replaced with new ones, a process which will cost £5m. It will be eight weeks before the new notes are in circulation.

"All new notes will be of the same design as the old ones, but will be printed in a different colour, feature a new Northern Bank logo and bear new prefixes to their serial numbers," a bank statement said.